A long time ago when I was an Army cadet I was assigned what is called a “Cadre Member” (a teacher). The Army in its infinite wisdom decided the best candidates for this position were Special Operations soldiers (Generally known as “Green Berets”) based on their extensive experience and knowledge when it comes to combat, training, and leadership.
During my first year as a cadet one of my cadre members told me something that has stuck with me ever since and I believe you can apply it to almost any situation….
“Slow is Smooth & Smooth is Fast”
I remember the day like it was yesterday. At the time I knew absolutely nothing about Army tactics or how to evaluate a casualty. I literally received a brief class on the material 4 hours before our scheduled event. As a first year cadet I figured there was no way I would be chosen to represent our company in the competition but sure enough, I was! Let me tell you, I was terrified of failing the event and letting my company down.
Before the event took place my cadre member pulled me aside and told me he did not care how well I did, but expected me to complete the event without any errors. He told me not to let the task at hand place insurmountable pressure on me to the point that I could not perform what I had been trained to do. “Slow is Smooth & Smooth is Fast”
In short I ended up placing 5th out of approximately 16 teams. During the competition the cadets from the other companies let the pressure of the event shake their confidence as soldiers and in turn made mistakes which penalized them severely during the competition.
My cadre member knew from his years of experience that when you are frantic and trying to “bite off more than you can chew” more times than not you end up choking. He told me he had seen it in combat too many times. There is a huge difference between a relaxed focused individual and someone who is moving so fast that they wind up being more reckless than they are efficient.
How can we apply this principle to investing?
Over the years I have noticed a script that goes without fail every single time someone I know finds out that I “actively” invest in the stock market. Here’s how the skit plays out:
- Friend: How much money do you make?
- Me: “A couple hundred dollars a month, but it fluctuates from month to month.”
- Friend: ***Funny look on their face or a scoff***
- Me: “Over time my monthly income will grow significantly, not to mention the capital gains I realize.”
- Friend: “Uh huh I’m sure your right.” ***Eyeroll***
- Me: “I would insist you educate yourself and start investing outside your 401k so you can tailor your investing to your personal situation.”
- Friend: ***Eyes glaze over***
I guess if I am not offering up 50-100% gains overnight or offering a strategy that will allow them to quit their day jobs in a month or two, then what I have to say is worthless! They probably think to themselves “Marvin doesn’t know what he’s talking about! I need to find someone like Gordon Gecko!”
Nothing in life worth having comes easy or fast. This is the type of attitude that sets so many investors up for failure. They expect astronomical gains in the stock market. It doesn’t help that we have an Army of financial advisors stating that the average annual returns over time are between 8-12% when for the last 10 years the stock market has been relatively flat!
I am absolutely convinced that the surefire way to manage and grow your wealth in the stock market is by purchasing large stable companies that pay dividends on a consistent basis and reinvesting them. It is not sexy, it is VERY BORING, you won’t be the life of the dinner party talking about your portfolio, chances are it will be the other guy who is trading currency or commodities and is leveraged to the hilt. Your portfolio will grow slowly that is a guarantee but over time you with expand exponentially if you follow this principle.
These individual investors realize this trend and are capitalizing on it:
You should too!
Remember, Slow is Smooth & Smooth is Fast!
Here’s to our Wealth!